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Our property model has turned the need for a home into a casino for banks and developers; and it’s not just an Irish housing crisis – it’s a European one, writes Mick Byrne.

LAST WEDNESDAY WAS not a good day for SAREB, the Spanish equivalent of our very own NAMA. The agency, which like NAMA was set up to manage ‘toxic’ real estate assets, was faced with the task of evicting 16 families from an apartment block in Girona, a small city near Barcelona. The families, like hundreds of others across Spain, had occupied the apartment block having been evicted from their previous homes due to mortgage arrears. At the time of the occupation, it had been empty for three years.

What made this difficult for SAREB was not so much the human consequence of evicting homeless families (for a financial agency, that comes with the territory), but the thousands of people who turned up on the day to block the eviction in solidarity with the would-be evictees.

This drama has been playing out across Spain since the beginning of the crisis, where a finance and property boom much like our own has come crashing down leading to over 350,000 evictions due to mortgage non-payment. Given the fact that there are between three and four million empty housing units in Spain, the housing crisis smacks of a society and economy dominated by an out-of-control financial sector. This troubling panorama is of particular relevance for Ireland, where there are approximately 100,000 households in mortgage arrears while upwards of 260,000 housing units lie vacant.

But these scenes would not be unfamiliar in other European countries, such as Portugal, where banks are evicting 24 families every day. Likewise in Hungary, where Irish developers were particularly active, there are 90,000 people in mortgage arrears of 90 days or more (according to figures from 2010) while at the same time up to 25 per cent of the housing built between 2007 and 2012 has not been sold.

Debt-driven owner occupancy sectors

In all of the above cases, debt-driven owner occupancy sectors dominate the housing market. It is no coincidence that from Spain to Ireland and from Hungary to Latvia, property bubbles emerged after widespread privatisation of the social housing stock in the preceding decades. Nor is it by chance that these same countries typically feature over-priced, under-regulated private rented sectors, leaving families little option but to seek a stable home through home ownership. Conor McCabe, in his book Sins of the Father, describes Ireland as a place were the ‘need for a home has been replaced by the need for a mortgage’ – and the same could be said for many countries across Europe.

But the unhappy marriage between housing and finance goes beyond the owner occupancy sector. Throughout the last decade social housing complexes in Dublin and Limerick were to be redeveloped under ‘public-private partnerships’ that relied on private finance. The local authority would give public land to developers for free, and the developer would build new social housing units while making a tidy profit from the construction of additional private housing.

If redeveloped social housing at no cost to the Exchequer sounds too good to be true, that’s because it is. City Councils didn’t stop to think what would happen if the bubble burst, or pause to consider the fact that developers such as MacNamara/Castlethorn, who were awarded three massive regeneration contracts, were among the most indebted in the country. In other words, no one stopped to think about the inherent contradictions of finance and property.

But if you live by the sword, you die by the sword – once property prices dropped the redevelopments ran aground, leaving the communities of O’Devaney Gardens, Dominick Street, Croke Villas and St. Michael’ Estate (to name a few) with nothing but vacant lots and empty promises.

Lessons have not been learned

The private rented sector is likewise deeply enmeshed with the world of debt – a fact well-illustrated by the 30,000 buy-to-let mortgages in arrears of three months or more. And high mortgage payments for landlords, coupled with light-touch regulation, mean high rents for tenants. The private rented sector is also soaking up pressure from the mortgage crisis – uncertainty in the owner occupied sector and the scarcity of credit is driving would-be buyers into the rental market, and means finding a flat in Dublin today can be as difficult as it was during the boom.

Most gallingly, the obvious lessons from Europe’s housing catastrophe don’t seem to have been learned. The UK, which had its own property bubble and subsequent bank bailouts, is leading the way with ‘help to buy’ incentives for first-time buyers that have sparked fears of over-heating the market. Social housing in Britain is also increasingly being transferred to Housing Associations – organisations which, crucially, can undertake privately-financed housing construction.

Similarly, in Portugal the Troika have been pursuing more rather than less ‘liberalisation’ of housing. Approximately 200,000 Portuguese pensioners benefited from a rent cap which has been abolished – leaving them exposed to the whims of their landlords and greatly increased rents. Meanwhile on our own shores, in a troubling case of ‘back to the future’ thinking, we have been hearing from various media sources and ‘experts’ (remember those guys telling everyone to buy during the boom?) that we need more private housing and more mortgages.

We’re facing a housing crisis

And let’s be clear: what we’re facing in this country is a housing crisis, not just a mortgage crisis. The dreadful situation faced by those who know all too well the haranguing telephone calls and letters from their banks is one component of a wider emergency. There are over 100,000 households on the social housing waiting list nationwide, funding for traveller-specific accommodation has been slashed from €70m to €4m (leaving an incredible 11 per cent of traveller families homeless), and the housing conditions in some social housing estates, such as Dolphin House, are so bad that the Irish Human Rights Commission has found that residents’ human rights are being breached.

At the same time, we have recently seen a long-delayed outpouring of disgust following recent reports on the conditions faced by the 4,600 asylum seekers confined to horrendous ‘direct provision centres’, where the most basic sense of personal integrity and dignity is undermined on a daily basis. Meanwhile, rent, particularly in Dublin, is on the increase, rent supplement is suffering ‘death by a thousand cuts’ and, according to Focus Ireland, the number of families becoming homeless every month in Dublin has recently doubled.

But, as has been suggested throughout this piece, this is not just an Irish housing crisis – it’s a European one. And at its heart is the dominance of a model which has turned our need for a home into a casino for banks and developers. Up until now the debate in Ireland and across Europe has focused on taking limited action on mortgage arrears in a manner which won’t upset the economy (ie profits). It’s time we inverted our priorities – let’s start from the point of view of a non-negotiable right to housing and build a society and economy which works to make that possible.

Tomorrow, Saturday 19 October, protests, assemblies and actions will take place simultaneously across Europe demanding the right to housing and the city. In Dublin, as we congregate outside the Custom House on Dublin’s North quay (home of the Department of the Environment – with responsibility for housing) at 2pm, we will know that those who are willing and able to take action to achieve the right to housing are not the politicians of Leinster house, or even the European Parliament, but those who gathered around an apartment block in Girona last Wednesday and those who will join us on the streets all across Europe this Saturday.

Mick Byrne is an Irish Research Council Post-doctoral Scholar at the National Institute for Regional and Spatial Analysis and participates in the European Action Coalition for the Right to Housing and the City.

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